The premium over spot is how much more you pay for a gold or silver coin or bar than the metal in it is worth at the day's rate, usually given in percent. In India it is made up of making charges, 3% GST and the seller's margin.
Working out the premium
Take the price you pay, divide it by the metal value, subtract 1 and multiply by 100: that is the premium in percent. The metal value is the fine weight in grams times the day's rate for one gram of pure metal. In India you can take the rate from our gold price per gram in INR or from the IBJA rate, which is quoted without GST and making charges.
Fixed-number example with round illustration figures, at a rate of 10,000 rupees per gram:
| 10 g coin, 999 | 1 g coin, 999 | |
|---|---|---|
| Metal value | 1,00,000 | 10,000 |
| Making charges | 4,000 | 1,000 |
| GST at 3% | 3,120 | 330 |
| Price you pay | 1,07,120 | 11,330 |
| Premium | 7.1% | 13.3% |
Same purity, same dealer, but the small coin costs almost twice as much above the metal. The live premiums in our tables change every day.
What drives the premium in India
- Making charges: the largest variable. Some dealers show them in a price breakup, others publish only an all-inclusive MRP, so work back from the final price.
- GST: 3% on every gold and silver bar and coin, charged on the metal plus making charges in the listings we checked. It raises the premium by the same amount at every dealer. See GST on gold.
- Size: minting a 1 g coin costs nearly as much as a 10 g coin, so per gram the smallest pieces are the dearest and big bars the cheapest.
- Metal: a 100 g silver bar is worth a fraction of a 10 g gold coin but needs similar handling, so silver premiums look bigger in percent.
- Design: religious or decorative designs can carry higher making charges than plain coins of the same weight.
- Delivery and payment: insured shipping, cash on delivery fees or card charges can add more than the quoted price.
Compare the final delivered price
A low making charge can hide a high shipping fee, and an attractive rate per gram can hide a lower purity. Check what you are comparing:
| What to check | Why it matters |
|---|---|
| Purity: 999, 995 or 916 | Removes the effect of fineness on the price per gram |
| Price per gram of fine metal | Removes the effect of coin size |
| Delivery cost to your PIN code | Insured shipping varies by dealer |
| Buy-back terms | Total cost of owning includes the bid-ask spread |
That is why metalsradar ranks by the real final price, then shows the premium over the metal value. Start with the cheapest gold coins in India or the cheapest silver coins, and see who we compare on the dealers page. Premiums on collector issues are a different story; see numismatic coins.
Related terms
Spot Price Bid-Ask Spread Bullion GST on Gold and Silver in India
FAQ
What is a good premium over spot for gold in India?
It depends on size and design, so compare the final price per gram of fine gold across current offers rather than relying on a fixed percentage.
Are making charges part of the premium?
Yes, making charges, 3% GST and the dealer's margin together make up the gap between the metal value and the price you pay.
Do I get the premium back when I sell?
Usually only partly, since a buy-back quote is based mainly on the metal content, so the premium is mostly a cost of entry.